Authorities Bust $232M Crypto Scam in South Korea, Arrest 215 Suspects

South Korean authorities have arrested 215 individuals in connection with a massive cryptocurrency investment scam worth an estimated 325.6 billion won – around $232 million.

The arrests, led by the Anti-Corruption and Economic Crime Investigation Unit of the Gyeonggi Southern Provincial Police, involve employees of a fraudulent investment consulting firm and its founder, who happens to be a popular YouTuber with a following of 620,000. The latter’s name has not been revealed yet.

Large-Scale Crypto Fraud Scheme

The scheme allegedly operated between December 2021 and March of last year and targeted over 15,000 victims, who were primarily middle-aged and elderly individuals, by promising 20-fold returns on digital asset investments. As per the report by Seoul-based media Yonhap, the group even managed to persuade some of the victims to sell their homes or take out loans to participate.

The fraudulent investment involved 28 different tokens, though investigations revealed that only six were actually created by the group. These tokens were listed on overseas exchanges via brokers, who artificially drove up their prices by making internal purchases before selling them to investors.

Meanwhile, the other 22 tokens experienced low trading volumes and were found to be almost worthless.

Among those arrested, twelve are still held in detention, including the YouTuber who ran the consulting firm. He had escaped South Korea, first traveling to Hong Kong and Singapore before reaching Australia.

This isn’t the first instance of scammers preying on the elderly with elaborate cryptocurrency schemes. Earlier this year, South Korean authorities arrested two individuals in their 20s and 30s who were behind a similar scam aimed at a senior. The victim, a man in his 60s, suffered a loss of around 5.5 billion South Korean won, equivalent to nearly $4.1 million.

South Korean Crypto Market Expansion

Amidst these crackdowns on fraudulent schemes targeting vulnerable populations, South Korea’s cryptocurrency market is experiencing significant expansion, with millions more entering the space. In fact, a recent report from the country’s Financial Intelligence Unit (FIU) revealed that the cryptocurrency investor base has grown to 7.78 million in the first half of 2024, up 21% from last year.

The growth is largely attributed to Bitcoin’s price surge, with daily transaction volumes rising 67% to 6 trillion won – around $4.3 billion. The total market value increased by 27%, reaching 55.3 trillion won – valued at approximately $40 billion. Male investors dominate, particularly those in their 30s. Most crypto users hold small portfolios, but a minority have significant assets, with very few holding over $724,000.